Govt's top priority: Stem Kiwi migration to Oz

Finance Minister Bill English says he would like to see the number of Kiwis crossing the Tasman to live halved, but warns that playing catch-up with Australia is a long-term game.

The National Party campaigned heavily on policies it claimed would help stem the flow of people moving to Australia - an exodus Prime Minister John Key and Mr English said was a symptom of Labour squandering the economic good times and driving people overseas in search of higher standards of living.

Its recipe to stem the flow included tax cuts, an economic package to encourage growth and investment, and incentives for professionals in critical areas to stay in New Zealand and work - all of which are included in Mr Key's "First 100 Days" plan.

The tax cuts will be first to see the light of day - they will be legislated for before Christmas and the next round will hit household pockets on April 1 next year.

In the year to October, 47,800 New Zealanders moved to Australia - 34,600 more than migrants coming the other way. It was the highest outflow since records began in 1978.

Mr English said that in the past, the long-term average of numbers migrating was about half of what it was now. Present levels were concerning. "We would hope in the future those peaks are significantly lower than where they are now.

"[Migration numbers] are driven significantly by the difference in growth between New Zealand and Australia. At the moment that's quite a big difference, so I don't see them slowing down in a hurry."

National's agreement with the Act Party includes a working group to look at ways to get pay parity with Australia by 2025, a goal Mr English said was "at the upper end of realistic". He said the goal's purpose was to focus Government attention on it.

He said the three-year programme of tax cuts, giving average wage earners an extra $47 a week by 2011, was the first step.

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"But New Zealand has come to the party late, so this is a signal to people that we want to compete. Catching up is a long-term job, but you need to create that sense of dynamism rather than complacency."

As well as a raft of measures aimed at economic growth, there were also policies to give incentives for people to remain in New Zealand. Voluntary bonding schemes for doctors, nurses, midwives, teachers and vets will be in place early next year so this year's graduates can sign up to them.

Mr English said Australia was competitive in these critical areas, and the bonding was part of the Government's bid to stem the flow of skilled workers. The write-offs are expected to be worth about $10,000 a year for doctors and $3500 a year for nurses and midwives.

National is also retaining Labour's interest-free student loans policy for those who stay in New Zealand and providing a further incentive for people to repay their loans early with a 10 per cent "bonus" write-off.

It will also retain Labour's housing affordability measures and introduce a "Gateway" scheme under which first-home buyers can build a house on state land with the option of buying the land later.

National's plug:

* Tax cuts to put an extra $47 in the pockets of the average wage earner by 2011.

* 'Voluntary' bonding schemes from 3 to 5 years for graduate doctors, nurses, midwives, teachers and rural vets to encourage graduates to go to hard-to-staff geographical areas, or speciality areas. A proportion of student loan is wiped off each year, based on the average student loan at graduation (about $10,000 a year for doctors, $3500 a year for nurses and midwives).